Business and Finance

The Iraqi government has asked for information about buying 36 F-16 fighter aircraft built by Lockheed Martin Corp, the U.S. Defense Department said on Friday.

The request, received August 27, is being reviewed “in the normal course of business” as part of the U.S. government-to-government arms sale process, said Air Force Lt. Col. Patrick Ryder, a Pentagon spokesman.

Updated F-16s are among the world’s most advanced multirole fighters and a powerful symbol of military ties to the United States.

Iraq’s interest in the fighter jet, reported first by The Wall Street Journal, could spark concerns among neighbors worried about advanced arms in the hands of a country still facing major internal challenges.

U.S. reviews of possible arms sale can take a year or more. They involve the departments of State and Defense as well as Congress and weigh power balances, technology security and other thorny issues instant cash advance. If a contract were ultimately signed, deliveries could take another year or more, depending on the model in question.

The Pentagon did not specify which F-16 version Iraq was eyeing, nor whether it was new or refurbished. A Lockheed spokesman referred questions to the Pentagon.

F-16C/D Block 50/52 models are now being produced for Poland, Israel, Greece and Pakistan. The United Arab Emirates was the maiden customer for the Block 60 version, the most sophisticated F-16 produced to date.

More than 4,400 F-16s have been delivered worldwide, according to Bethesda, Maryland-based Lockheed Martin. Morocco this year became the 25th and latest overseas buyer with a deal for 24 new Block 50/52 models and related gear said by the Pentagon to be worth as much as $2.4 billion. 

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Cigarette company Altria Group Inc (MO.N: Quote, Profile, Research, Stock Buzz) is in advanced talks to buy Skoal and Copenhagen smokeless tobacco maker UST Inc (UST.N: Quote, Profile, Research, Stock Buzz), a source familiar with the discussions told Reuters on Friday.

The New York Times reported that a deal worth more than $10 billion could be announced as early as Monday, though the timing could be sooner given media reports of the negotiations.

The source could not confirm the price or say when a deal might be announced.

UST shares rose 20 percent in pre-market trading to $65 from a close of $54 on Thursday.

Altria spokesman David Sylvia declined to comment on speculation about a deal quick payday loans. A UST spokesman could not be reached for comment.

UST is the largest player in the U.S. smokeless tobacco market but has seen its market share pressured as cash-strapped consumers trade down from the company’s higher priced brands.

Altria has long been seen as the likely buyer of UST as part of a strategy to expand into other tobacco products; the core market for its Philip Morris USA unit, maker of Marlboro cigarettes, continues to decline.

Speculation over a deal picked up in February as Altria was spinning off its international tobacco arm, Philip Morris International. 

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Nasdaq OMX Group Inc (NDAQ.O: Quote, Profile, Research, Stock Buzz) could bid for a majority stake in the Prague Stock Exchange, which is on the auction block and would give the U.S. company a foothold in the hotly contested region, sources familiar with the situation said.

A source at the privately held Prague exchange, which is valued at more than $300 million, said Nasdaq has showed interest.

A second source with direct knowledge of the situation told Reuters a stake in exchanges based in Central or Eastern Europe, such as the Prague exchange, “is certainly something that is consistent with what OMX has looked at in the past.”

“The Prague exchange is running a pretty broad process, so I think you can assume that there are a lot of different participants taking a look,” said the second source, who spoke on the condition of anonymity.

Nasdaq, which completed its merger with Nordic exchange OMX earlier this year, said it does not comment on speculation freecreditreport.

But analysts said a bid from Nasdaq would avoid the politics that could snag a bid from neighboring European exchanges, which are keen to absorb smaller peers that fail to attract many new listings, such as the Czech Republic market.

“Because Nasdaq is a big player in the world, there would be a lot of interest among small exchanges to be associated with it,” said Bernardo Mariano, an analyst specializing in privately held exchanges at Connecticut-based advisory firm Equity Research Desk.

“This would be a great move for Nasdaq to create a beachhead in Eastern Europe, which has been a very hard market to consolidate,” 

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The U.S. Small Business Administration is trying to win over small and rural banks and credit unions by simplifying its lending process.

The federal agency guarantees loans to small businesses looking to expand, invest in new equipment or refinance existing debt. These companies often would not receive financing without the SBA’s backing. The agency’s programs, particularly the flagship 7(a) program, allow banks to make such loans without taking all the risk.

Still, many small and rural lenders do very little SBA lending, or shy away from the program because they are afraid of the paperwork involved, said Virginia Smith, lender relations specialist for the agency’s Syracuse District, which includes the Albany, N.Y., market.

The SBA therefore has created a program, called Small/Rural Lender Advantage, aimed at lenders who averaged fewer than 20 SBA loans a year for the past three years. The initiative was tested in the SBA’s Region VIII­—covering North Dakota, South Dakota, Colorado, Wyoming, Utah and Montana—in January. The agency made a few changes and now is taking it national.

“It is really a two-fold initiative,” Smith said freecreditreport. “We want to encourage lenders who are smaller to increase their SBA portfolios. Second, we want to encourage lenders who have never done SBA loans before to do so.”

Small/Rural Lender Advantage offers a simplified application for loans of $350,000 or less; an expedited loan processing time for routine credits; reduced financial documentation requirements; applications that can be faxed or e-mailed to SBA; a simplified loan eligibility questionnaire; and specialized assistance to small/rural lenders on complex eligibility issues.

The SBA is reaching out to small banks at a time when many large lenders have curtailed their 7(a) lending in light of the credit crunch. Over the past two years, about 400 lenders nationwide have left the program.

Smith said Small/Rural Lender Advantage is not intended to fill the gap.

“These are small lenders, they could never make up those numbers,” she said. “But we need to be everywhere, and hit everyone we can. And to have a program for these small lenders just makes sense.”

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Personal income fell in July by the biggest drop in 3 years after surging the prior two months because of $90 billion in economic stimulus payments.

The Commerce Department said Friday that individual income decreased by 0.7% in July after a 0.1% jump in June and a 1.8% increase in May. Economists polled by Briefing.com were expecting income to fall by 0.2% in July.

Economists were expecting a decrease in income following the temporary boost provided by the stimulus checks.

But the sharp decline was the largest drop off since August of 2005, when personal income plunged by 2.3%, according to the Bureau of Economic Analysis.

While personal income fell, disposable personal income sank even further in July. Disposable personal income - which is what consumers have after they pay taxes - fell by 1.1% in July, after a 1.9% tumble in June. In May, however, disposable income jumped by 5.7%, largely due to the initial wave of stimulus checks.

The stimulus program provided consumers with cash to spend, and in general, Americans spent it, boosting the nation’s economy. On Thursday, second-quarter gross domestic product was revised up to 3.3% annual growth, after being initially reported at 1.9%, according to the Commerce Department.

But personal spending in July increased by just 0.2%. That was in line with economists’ expectations but lower than the 0.6% increase in consumer spending in June.

Inflation concerns: The uptick in consumer spending was primarily driven by higher prices, however. Individual spending, when adjusted for inflation, actually fell by 0.4% in July, after dipping by 0.1% in inflation-adjusted dollars in June, according to the report.

"Apparently, a large portion of the extra money provided by the rebate checks was eaten up by higher prices at the grocery store or siphoned away by higher prices at the gas pump," wrote Mark Vitner, senior economist at Wachovia, in a note Friday.

The government’s stimulus program provided temporary relief, but "now we are losing momentum again," added Robert Brusca, Chief economist at FAO Economics pay day loans. "You have to be concerned about where we are heading."

Another measure in the report that tracks prices that consumers pay on goods and services, excluding food and energy, rose by 0.3% in July over the previous month.

In addition, the core personal consumption expenditures index - a year-over-year inflation gauge that also excluded food and energy - rose by 2.4% in July from the same month a year ago. Core PCE was 2.3% in June. The Federal Reserve is widely believed to prefer that the core PCE stay in a range of 1% to 2%.

Rising inflation is hurting the struggling economy, and posing a dilemma for the central bank. Brusca said that members of the Fed concerned about inflation "will not take much comfort from" the core PCE number.

Looking forward, Vitner said that lower energy costs in August could potentially be good news for inflation.

"Gasoline prices plummeted in August, which should provide some near-term relief to the inflation figures and real incomes," he wrote.  

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Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) expects to see double-digit growth in assets serviced by its recently expanded Asia Pacific prime brokerage arm, as it seeks more business with global hedge funds setting up in the region.

Even with tumbling stock markets hammering the performance of most Asia-focused hedge funds, many well resourced overseas managers have stepped up their focus on the region, said Hannah Goodwin, head of Prime Finance, Asia Pacific for the U.S. bank.

“We’re seeing continued growth from the global hedge funds … there are over 100 global hedge funds that now have offices somewhere around this region. We are positioning ourselves to be able to service them better,” Goodwin said in an interview.

“I’m not seeing anybody say they’re pulling back from the region. I think it’s pretty much business as usual with some people looking at the opportunities further down the line.”

Overseas hedge fund managers that have set up operations in Asia include Citadel Investment Group, Och-Ziff Capital Management Group and Britain’s CQS.

Citigroup said early last month that the Asia Pacific prime finance unit, which competes with U.S faxless online payday advances. peers including Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) to service hedge funds in the region, recently added 8 positions, growing the operation to more than 40 staff.

Prime brokers provide trade execution, stock lending, capital introduction and other services to hedge funds, whose high volume trading strategies can make them a rich source of fees for the prime brokerage arms of big financial firms.

POOR INDUSTRY PERFORMANCE 

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